Loopt Tries a Groupon in Reverse | Hacker News Reader

Loopt Tries a Groupon in Reverse

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100 pointssama52 comments

While it's a theoretically cool concept, the actual implementation doesn't appeal that much to me as a consumer and I'm not sure it'll really appeal to businesses. Would I want to get $20 at a nearby pizza place for $10? Sure. But how useful is it if I have to wait an indeterminate amount of time (if ever) to get the deal? I'm likely to only suggest local businesses that I frequent a lot anyway, and how useful is it to them to offer discounts to mostly regularly paying customers?

That being said, I do think this is moving the industry in a direction for variable prices for local businesses. Imagine a real-time feedback loop where it's 4pm and you could ask your local pizza place for a discount and they could instantly reply whether they granted it or not. It's a lull before dinner and they have some pizzas from lunch they've just kept warming up, so they grant you the discount. Or actually a kids' soccer team shows up and takes over the place so they decline the discount.

This doesn't work so well with resellers (which is pretty much any restaurant), but it could definitely work with service businesses that have to pay their staff whether clients show up or not. We'll see if companies like Loopt have this vision in mind and whether they can make it possible.

A friend of mine has a company in Japan which pretty much solved this. Solution: big digital billboard in mall which aggregates tweets from mall merchants. If nobody is getting their hair cut, they tweet "$5 off for next person at Cheap Cuts" from cell phone. Merchants/mall apparently think it is a gift from God.

Simple and useful. Good idea.

Solution: big digital billboard in mall which aggregates tweets from mall merchants.

A virtual billboard in the form of a smartphone app might be preferable in different kinds of public spaces. It might also be a good adjunct to the digital billboard.

If twitter added geo-location specific streaming search results, they'd have this.

A virtual billboard in the form of a smartphone app might be preferable in different kinds of public spaces.

(Potential) customers need to (a) know about the app and (b) care enough to install it and (c) care enough to check it at the right time. However a big physical billboard has none of these problems. Potential customers are much more likely to see your message.

This is a much better idea. Instead of daily deals, realtime deals. Let the business offer a limited time deal (30mins, 1hr, or until they cancel). For example, an empty restaurant or bar could post a 50% discount for customers placing orders in the next 30 mins - not only giving their staff something to do but a busier restaurant/bar gives social proof attracting further customers later once the deal expires. Would also allow them to better manage the people taking advantage of the deal, by monitoring the response rates and adjusting the discount or ending the deal as they see fit. The scarcity factor of a deal that could end at any moment might also be especially attractive to customers. Loopt would be well positioned to do this, because the customers who would want to take advantage of a real time deal would be those currently in the vicinity of the business (to avoid travelling to a deal only to find it has ended) and I believe they have that data.

Groupon is headed this way with GrouponNow:

"Introducing Groupon Now: Real-time deals that attract customers exactly when you need them."

http://www.groupon.com/merchants/welcome

Interesting. Still, the realtime location data Loopt have would make this much more effective. People might not want to travel to a realtime deal running somewhere in their city, in case it ends before they arrive. But if the deal is running at a bar next door or on the street they are walking along then that problem is eliminated.

How about combine this with book-in-advance? So say you get $20 of pizza for $10, coupon website actually runs the payment system - takes payment of $10 in advance, and then you show up to get your deal. Then limited-capacity places could do realtime deals available to limited number of people to reach but not exceed their capacity, and bargain-hunters would be sure they'd get their deal and not show up somewhere that just became full.

Why wouldn't a business just use Twitter or Facebook for announcing a realtime, short-term deal like that?

I follow most of my local businesses for that reason - many of them already tweet about on-the-spot deals which works the same way. Plus, it's an incentive for customers to follow their social media accounts which also helps with other types of advertising and promotion.

I'd guess because they'd have an audience including potential new customers with an app like that whereas anyone following them on Twitter or Facebook is already a customer.

I never look at my twitter, but I've been known to stop in for one drink and stay for 10!! ;)

There was an Internet cafe chain in Europe and NYC, run by Stelios (the EasyJet guy), called EasyEverything, back around 1999-2001.

They did dynamic pricing inside the webcafe, based on occupancy.

This kind of feedback through pricing, through some kind of tech channel, maybe with location based service, would be awesome.

I think Groupon is already doing something like this. Check out their "Now Deals"

http://www.groupon.com/now

How's this. I want to buy a new graphics card. It retails for $200. I offer to buy it for $150, the store makes a smaller margin but still profits.

You might not wait a long time to get a pizza but would be willing to wait a few days to see if you can get the new cellphone or laptop at a cheaper price?

Still suffers from the problem that in order to obtain the discount, a bunch of other people would have to request the discount on the graphics card in those few days. That's unlikely so I probably wouldn't bother asking for the discount (in turn, everyone else is thinking the same, which makes it even less likely).

If there was enough activity, it could be fun. Imagine for example:

"Lunch today within 5 miles of X, for $8.75"

You could get a lot of variety in your lunches, and if you get tired of the food offered at $8.75, bump the number up or down to get different offers!

Two ways to pivot with this that I can think of:

1) Flash sale deals - short term sales at businesses. 2) Better monitoring of demand so that prices can be intelligently adjusted. More like market research for businesses trying to figure out what the best price point is.

I have a weekly gamer meeting that always orders a pizza. We could easily put in a deal offer of this sort.

This might not be everyone but I think a lot of folks have a routine they could leverage for a pizza deal.

> ask your local pizza place for a discount and they could instantly reply whether they granted it or not

Sure, that's haggling, it's done pretty much everywhere in the world and throughout all of history. Where it hasn't worked is with franchises staffed by dummies working out of a handbook as it's considered too risky if one lets staff have such control over prices in case they grant their friends discounts. WalMart allows their staff to set prices though and it works there. They don't haggle though. It would be pretty nice to see haggling implemented in modern strip mall sorts of places.

That seems strictly inferior to Groupon: it cannibalizes existing customers by design, but to get there, you need to nondeterministicly charge people's credit cards. So it is a reward card, with the restaurant paying 50% of reward values to, um, not reward their customers except weeks after the fact some of the time.

Honest question... Does anyone on HN use Loopt? I've tried it a few times over the years and it never really comes to close to making me want to continue using it.

I tried, but it was before iPhone had any kind of push notifications, live in a low population area, not a lot of my friends are early-adopter social tech types, and I'm too old to want to hang out with random people I saw on Loopt -- so, it didn't work for me. I'd be willing to give it another try.

Interestingly, in the meantime, there was a lot of foursquare adoption among friends and in the area -- enough to get network effect benefit. I don't think many of my friends have heard of Loopt.

I tried it, but found it slightly less compelling than Foursquare or FB Places (which I tried for a month of solid use); none of these services really hold my interest.

The only thing I am interested in is where my actual friends are looking at doing things in the next 0-8 hours, not where people I know from facebook are during the day. Google Latitude actually does a better job of this for me than any other service I've tried, but it's still basically useless.

Checkins were marginally useful to me in seeing where I ate lunch each day. Looking at things retrospectively was the most interesting use, and turned out to be somewhat depressing (home, gas, office, lunch across the street, office, fry's, office, datacenter, home, repeat indefinitely).

Haven't seen any Loopt activity on my social networks for a long time now. Are they in the deadpool?

I doubt this will work because it doesn't take into account Zipf's law. The problem is that we live in a world where 1% of the population creates 90% of the content, so it'll be impossible to get enough people actively participating except for maybe with places like Shake Shack that don't need it anyway. If they created a new service specifically designed just for this then it might work with a few tweaks, but creating something just for the Loopt user base seems like a dubious decision.

I can't see this variation of the model working because usually when you are near a store, the deal or offer is something that needs to be acted on within a few minutes

Imagine you are going out to get lunch. In the GroupOn model you have already pre-purchased a deal and you can plan ahead. In this Loopt model you can't make an instant decision based on where you are since it involves going back to loopt, etc. etc.

This would be more interesting if vendors could list their deals or vouchers on loopt and it would alert you when you are near one (based on location and/or time)

Ten years ago there was a trial of a similar system - the name of which I cannot recall. But it involved sending bluetooth alerts to your phone when you were near a store that was running a promotion or deal. I used it once to grab lunch and it worked well (you would give your phone number at the counter, the discount was ~30% IIRC).

Vendors would likely be interested in a system where they could specify something along the lines of: send me a thousand customers over the next month between 2-4pm who are within 2 miles of my location and are interested in 30% off a pizza. Do not send me customers who have already redeemed a coupon in the past x months. The problem is that type of system would involve a large upfront investment from loopt in going out and getting the customers onto the system.

Loopt have the location users, but not the deals. On the other hand GroupOn have the deals, the vendors and the users but do not have the location system. One of these is easier to build than the other

I think this is interesting -- I'd probably use it in high density areas with lots of options, only. For instance, there are ~50 restaurants in Castro St in Mountain View. I've been to 15. I'd like to try about 20 of the others, so signing up for all of those would make sense.

It's probably best suited for finding new service providers for recurring needs (gas, car washes, oil changes, ammunition, range time, food) and less suited for one-offs (funerals, weddings, ...).

The key here is timing. Its easier for Priceline to check on the bids with airlines because most of the airline systems support rapid data transfer. In the case of restaurants, it is difficult to predict and build a automated way to get 'approvals'. Therefore, the time it takes for them to get answer back from the restaurant will determine the success of uDeal.

Taking the immediate gratification away from the consumer and giving it to the business, combined with surprise credit card charges, makes this pretty unappealing. At least to me, as a consumer.

Have any of these customer-generation people actually run a brick-and-mortar business themselves? How does anyone expect a business model to be sustainable in the long term when it relies on companies selling their goods at a quarter of their typical price?

A business wants a reliable stream of customers, with predictable peaks in activity. When a startup addresses that at a price that businesses can actually bear, then I'll believe the company is going somewhere.

sounds like a good idea in theory, but the reason some businesses tend to like groupon is that it brings NEW customers in the door. it's a marketing platform and businesses know that can be expensive. 50% is a lot to pay for a customer rewards program.

our hope here is that this will bring a higher quality set of new customers in the door. word of mouth referrals tend to be pretty good. if i create a deal at a place and share it with my friends to get critical mass, that may be a better crowd that a daily deal email list.

But given a deal is contingent on your salesforce convincing the merchant to work with you (on a very tight timeframe / compressed sales cycle), doesn't this mean that by definition, most of the deals desired by users will not come to fruition? Won't this result in a poor experience for the majority of users?

Hmm, I request a deal from a business nearby. I am already there physically, but I don't get anything at that time, for all the effort I've put into getting there.

I have moved on, it is three months later - I might be in a different country for all you know - and voila, a credit card transaction tells me that I've purchased some deal that I probably have no longer any interest in.

Seems like it could have worked in 1980, but for today, I see gaping holes in user experience.

"Hi, I have 15 customers I've led along to believe they might get a half off deal at your restaurant, are you game or should I just tell them your word is no good?"

This is actually quite an interesting (if somewhat poignant) argument. In a way your name as a merchant might suffer even if you didn't add yourself to the system. This might be the Achilles heel of the whole operation.

Edit: typo. 'Achilles Hill'? Really?

If they start offering reverse deals, will everything become like a turkish Bazaar, with everything basically being haggled on the fly?

When I read this article, it screamed Priceline to me. Its essentially doing the same thing that Priceline does for the travel industry. Its asking customers to select a deal or 'bid' on a deal and then uses that knowledge to close the deal with the restaurants. Like Priceline, Loopt will already have the credit card info and I am guessing the customer will be charged automatically.

This sounds like enabling haggling in markets where traditionally it hasn't been done (even in Asia where haggling over price for any product is quite common).

If I say I will go to a restaurant on the condition that I get a 50% discount, I'm probably not going to spend much more there or go back again without a discount. Not sure this is a winner for businesses.

Too much time between the request and delivery. There needs to be some sort of instant gratification for this to fly, otherwise it's essentially asking users to do free market research. Profit sharing with the users should the deal come into fruition would certainly inspire them to continue populating the merchant database.

It sounds good that using loopt to search some kind of stuff which you need it instantly(like cafe,bar..) in a local place you are not familiar, rather than using it like Groupon's vision.

The most importantly, local markets should feed back the system instantly and people can make proper decisions at that moment.

I think, mainly idea is cool.

Sounds stupid for the small businesses, because only people who already know about a place will ask for a deal there, so they won't be getting any new eyeballs and probably no new customers either. It will just be people wanting deals at places they already go to.

But just imagine that they can implement something even cooler: I can actually see menus of these pizza places with prices - and information whether they are open or closed? Really...

As described, that's just way too complicated. It also fails completely as advertising since the people have to start out wanting to eat or shop at the place.

You are missing the point: if it helps you fill tables with customers, it is good advertising regardless of the customers being new or not. Also, how is an offer based on what you know people want worse than one published to the general public in, say, a newspaper ad?

Customers proposing that a store they know about and already wish to shop at lower their prices is not the same thing as "advertising". To call this advertising as you just did is a misnomer.

This is wrong on so many levels.

The first one is that as a business you are supposed to use deals to bring in new customers, not to let the ones that already know you have a discount

The second one is how it'll be marketed to business owners, I understand that a fool is easily parted with this money but this is borderline stupid

Good idea, but u-Deals is a dumb name.

It sounds like blackmail. I'd be just as embarrassed using Loopt as I would be using Groupon.

I don't understand, how is it blackmail? It sounds useless to the store owner, because people basically say "I want cheaper things, give them to me", but it doesn't sound at all like blackmail.

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